My father is a former economics major who spent 30 years as a mortgage banker before starting his own company (which does economical things so complex that to my simple mind, they might as well be magical). One of the things that constantly irks him is the loaded language that the nightly news uses to describe our economic situation: words like "crisis," "downturn," and, worst of all "recession."Now, anybody who has spent more than forty seconds online in the last six months can see that we are, more than likely, in the middle of a recession brought on by a downturn in the real estate market because of the current credit crisis. That said, I'd like to ask the question: would we be better off if TV simply lied to us about all of these things?
Here's what I mean:
The way a society feels about its economy is a lot like the way your wife feels about her body. The reality of a given situation (a few extra pounds, a few wrinkles here or there) doesn't matter as much as the feeling about the situation ("I feel beautiful, maybe I'll put on the fancy underwear tonight").
It's our job as a husband to make sure that our wife's consumer confidence never falls below a certain level. That's because the second she stops feeling beautiful, the less likely she'll be to take off her clothes and let us perform our husbandly duties. Thus, when she appears wearing a pair of pants that not only make her butt look big, but also bring up a solid philosophical question as to whether her butt might now be defined as a planetoid, you don't dare say as much.
"You look great, honey!" That's the answer; it's the only answer.
The economy works in much the same way. The better society feels about it, the more they spend and invest, and the better we all wind up doing. Words like "recession" and "crisis" affect the economy the same way that "fat" and "wrinkly" affect your wife. When society hears them enough, they go into lockdown mode, which means no nookie for anyone.
I'm all for truth in media, but I also fear an economic downturn. I mean, I'm a comedian who moonlights as a blogger. As far as elasticity is concerned, I'm about as necessary to a recession-ravaged country as the Magratheans. I'd like to keep the good times going as long as possible.
Thus, if perception equals reality, doesn't it make sense for loaded language to be kept out of the national discussion of the economy? The people who need to know these things are still going to be informed -- brokers and bankers, fat cats and robber barons -- while the rest of us can operate under the best kind of ignorance: blissful.
And, let's be honest, the news media is already biased (though in which direction depends entirely on the political eye of the beholder). Wouldn't it be nice if the bias was done not out of shallow political beliefs, but rather to help society as a whole?
I know this smacks of Orwellian control or Soviet Era Five Year Plans ("Shoelace Production is UP 42%!"), but that what makes this such an interesting question to me. At first blush, the answer seems to be an easy "no", but when you think about it a bit, it becomes a bit more murky. What's wrong with being lied to if it's for our own good?
(Of course, as I stated earlier, I have very little economic training. If some of our more enlightened squadders can offer some insight on this subject, I'd be thankful).
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Reader Comments (Page 1 of 1)
4-15-2008 @ 10:48AM
Hank said...
No they should not lie about the state of the economy. Neither should politicians, of any party, lie and exagerate in either direction based on their political needs. And that is an even bigger issue. But hyperbole seems to be the order of the day in all aspects of society. The solution, if possible, is for the public to better educate themselves on the topics at hand so they can judge for themselves. Most of these issues are not that tough to understand despite insider efforts to cloak them in jargon.
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4-15-2008 @ 11:08AM
Kim said...
Of course we have the right to hear the truth. The problem is that the news media sensationalizes and beats you over the head with every single news item! Thank you 24-hour news channels!
P.S. Any economy that is driven almost entirely by consumer spending rather than by manufacturing, natural resources, and exports is fundamentally unsound.
P.S.S. First Americans are told that we don't save enough money and carry too much consumer debt. Now we're being told that we don't spend enough money. Well, which is it? I think the former.
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4-15-2008 @ 11:31AM
cdawg said...
It's not about lying to the people, its about not escalating a situation. We are not YET in a recession, but the media reports that it looks like we will be. Which in turn leads the average American like me to look at our financial position and move our money out of stock into more secure instruments, which in turn leads to declining stock market, which in turn leads to recession.
Instead of lying, the media needs to STOP JUMPING THE GUN and freaking out the people before anything actually happens. It only causes panic. See, e.g. 1929 and 1987 stock market crashes. No need to freak the people out yet...
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4-15-2008 @ 11:35AM
KMF said...
I would want to hear the truth. It's more comforting to know everyone's in the same boat as me. Being a freelance artist I know, art is the last thing on people's mind when the economy heads south. Though the news make things seem bleak, my work has been steady enough to keep me treading water with a tight penny pinching budget so perhaps it's not so bleak as the news makes it sound. If I didn't watch the news to know the state of the economy and my art starts going unsold I might spend weeks wrapped in a blanket eating Oreos pondering a 9-5 job. ;)
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4-15-2008 @ 11:41AM
beanspants said...
In macroeconomics, a recession is a decline in a country's real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
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With this definition we are not currently in a recession. We are facing decreased levels of growth (ie, like you getting a 2% raise this year vs a 5% raise last year), but are still growing.
Of course, the info for this quarter is not out yet, so if it shows negative growth, then we could be starting a recession.
TV has not lied to you, so take it back!
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4-15-2008 @ 12:01PM
Kirby said...
No, it's not okay to lie to manipulate people. Even if it's for "their own good". That's denying someone else the chance to make reasonable decisions. Like not quitting the stable job now to start their own business, or not putting all their savings into high risk growth stocks.
And consumer confidence is _not_ why we're having the current problem. It comes from people getting 'clever' and making a bunch of ill-advised loans, and then getting really 'clever' and banking on housing costs continuing to rise to cover their losses, and mixing all the good and bad loans together. When this stopped working, suddenly a lot of loans were worthless, and since they'd muddied up their loan classifications, pretty much all the loan-based securities are worth a fraction of their value, which is a big deal and has ripple effects.
And then people started to panic, but with good reason - something really bad actually happened. The cause is not that people got their britches in a bunch - the cause was an economic shell game that got revealed.
The main complaint I have about the media is that they don't have the patience to really explain what's going on. They don't tell us enough, not too much.
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4-15-2008 @ 2:19PM
Karen said...
Amen, Kirby. Got it in one.
I would also point out that "lying" about economic realities in order to keep depressed citizens from making the downturn worse could also result in actions made out of ignorance that could also worsen the situation. So, if we're damned if we do AND damned if we don't, I'd rather be damned and educated.
4-15-2008 @ 1:46PM
PurpleSlog said...
In my experiences most journalist are incredibly stupid and not only do they have little understanding of economics, they hold "folk economic" beliefs that are quite wrong.
Couple that with their need for drama, and you get the language and reporting they use.
So, when you ask "would we be better off if TV simply lied to us about all of these things"...I would reply they are already misleading us - partially through stupidity, partially through malice.
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4-15-2008 @ 1:07PM
Jennifer said...
You know what? When rounds of layoffs start happening everywhere, people are gonna figure out there's a recession even without the news telling them so.
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4-15-2008 @ 1:13PM
heinlein said...
My take is that during the "roaring twenties" people were told that they were in an permanent boom, and the same thought were sort of present before the IT-crisis. Pretending that everything is good, is only going to make the downfall harder. The longer the "current" housing bubble had lasted the more people would have been effected, and as said above all of us makes econimic decisions like buying stocks and new houses, so we all really need to know the economic state to make a better decision.
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